Sometimes we get spoiled. We want a respectable dividend and we want capital gains. We want it all. Dominion Resources (D) has delivered the dividend, but it has been struggling for months to launch a sustained upside rally. Maybe things are changing -- read below.
Though D has been trending higher from a December low, the overall price trend the past 12 months has been sideways (see the chart above). Prices have swung above and below the 50-day and 200-day moving averages, but in early March the 50-day crossed above the 200-day for a "golden cross" buy signal. The On-Balance-Volume (OBV) line has been trendless and has only mirrored the price action, up and down. The OBV can be a coincident indicator and it can be a leading indicator.
This weekly chart of D, above, shows that prices have been confined to a sideways trend for two years. The technical indicators on this time frame suggest that D will try to break out over $75, and maybe even $80 in the weeks ahead. Prices are above the slightly rising 40-week moving average line. The OBV line broke out above its sideways range, and the Moving Average Convergence Divergence (MACD) oscillator has crossed above the zero line for an outright buy signal. Looks like D will try to deliver a nice yield and capital gains.